Holcim all set to pick building contractor

Leading cement manufacturer Holcim Philippines will soon decide on the contractor that will put up a new cement plant in Norzagaray, Bulacan, as the company hopes to add about 2.5 million metric tons to its annual production capacity by end-2016.

Cost of constructing the new plant “could be better” than the earlier estimated outlay of $400 million to $550 million, Holcim Philippines chief executive officer Ed Sahagun said in a recent briefing.

At this point, Sahagun said, it is only a question of who will undertake the engineering, procurement and construction agreement, likely to be undertaken on a turnkey basis.

“They will just deliver to us the plant,” Sahagun said.

There are three competing suppliers. They have until November 7 to submit their respective bids for the project, seen to be the single biggest cement plant in the Philippines.

Sahagun said the site for the plant is now being prepared so that the project can start as soon as the contract is approved by the company’s board.

Holcim’s board is set to meet on Nov. 18.

The company has underestimated demand for cement in the country, Sahagun said. The company earlier assumed that the industry would only grow by 5 percent.

In the first nine months of the year, he said, the industry grew by 8 percent. In the third quarter, the industry grew by 9 percent.

Working on a growth rate of 8 percent, Holcim can cope by improving operational efficiency in its existing plants, he said.

“If industry continues to grow at a faster rate, we have to reassess,” Sahagun added.

Holcim is also on track to fully revive its grinding facility in Mabini, Batangas this month. The facility will ensure steady supply as demand rises. The plant, which is now undergoing a debugging process, is expected to boost Holcim’s capacity by close to a million tons a year.

At present, Holcim operates four cement plants and employs 1,700 workers in the Philippines.

Holcim grew its nine-month net profit by 47.8 percent year-on-year to P3.74 billion. Results for the third quarter, usually a lean period, came as a surprise, with steady growth in volume and stable prices.

Net profit in the third quarter alone rose by 34.2 percent year-on-year to P691.2 million. Doris C. Dumlao